Key facts
- NSW government legislation imposes fines up to $22,000 for undisclosed AI-generated or digitally altered rental listing images.
- A property in Leichhardt was cited by the NSW government as an example of an 'AI-doctored rental listing'.
- The listing agency IB Property confirmed the image showed a real $5,000 mural of Bondi beach, not a digital alteration.
- The new laws target 'housefishing,' where digital alterations distort a property's true size and condition.
- The legislation also includes privacy protections for renters, standardizing application forms and limiting data collection.
- Penalties for privacy breaches under the new laws can reach $11,000 for individuals and $49,500 for corporations.
The New South Wales government's initiative to combat misleading rental listings through new legislation has encountered an early challenge, as a property highlighted as an example of AI manipulation was revealed to feature a genuine photograph of a mural.
The state government, in a media release on Friday, presented a Leichhardt property as an 'AI-doctored rental listing,' intending to showcase the need for protections against deceptive marketing. However, the listing agency, IB Property, refuted these claims, stating that the image depicted a real, $5,000 mural of Bondi beach visible from within the unit, rather than digitally generated coastal views.
IB Property confirmed the mural was commissioned by the landlord and remains in place. The property was leased in February 2026 and has not been advertised since. The Better Regulation and Fair Trading Minister, Anoulack Chanthivong, whose office issued the release, reiterated the government's commitment to protecting renters from misleading practices.
The new laws, set to take effect in early 2027, aim to address the rise of 'housefishing'—where digital alterations misrepresent a property's condition or size—by imposing fines of up to $22,000 on real estate businesses for failing to disclose digitally enhanced images. Industry figures like Tim McKibbin of the Real Estate Institute of NSW acknowledged the long-standing use of digital tools like Photoshop in property marketing but drew a distinction between virtual staging and outright false advertising.
Stewart Bunn of First National Real Estate noted that such practices erode consumer trust, citing instances of AI generating non-existent schools or depicting unoccurred renovations. Dr Leah Li from RMIT University's research highlighted a lack of sector-specific AI frameworks in the property industry, with generative AI systems often prioritizing visual appeal over accuracy, leading to 'hallucinations' that can mislead prospective tenants about a property's size, layout, or condition.
Tenants' Union of NSW chief executive Leo Patterson Ross argued that deceptive imagery can artificially inflate demand and pressure renters, advocating for stricter measures beyond mere disclosure. The legislation also introduces significant privacy protections for renters, standardizing application forms and limiting the collection of sensitive personal information, with penalties for breaches up to $49,500 for corporations.